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Escribano v. Travis County, Texas

United States Court of Appeals, Fifth Circuit

January 10, 2020

JOSE ESCRIBANO; BRYCE MILLER; ROBERT MILLS; MICHAEL STRAWN; JAMES WILLIAMSON; AL LEBLANC, Plaintiffs - Appellants
v.
TRAVIS COUNTY, TEXAS, Defendant-Appellee

          Appeal from the United States District Court for the Western District of Texas

          Before DAVIS, SMITH, and COSTA, Circuit Judges.

          GREGG COSTA, CIRCUIT JUDGE:

         Whether a worker is entitled to the Fair Labor Standard Act's time-and-a-half requirement for overtime pay is an important question for both employers and employees. Unfortunately, the answer is not always straightforward. A number of exemptions take employees outside the FLSA. Byzantine regulations define those exemptions. Informal Department of Labor guidance in the form of opinion letters also tries to clarify the exemptions. Then there can be exceptions to the exemptions. Figuring out if an exception brings the employee back under the FLSA may require looking at yet another set of regulations and agency guidance.

          This FLSA case involved one of those multilayered classification determinations. The facts were not complicated, so the trial lasted less than a week. But confusion over two possible exemptions, as well as an exception to those exemptions, caused the posttrial litigation to last more than two years. The result was a ruling that the employer had established as a matter of law one element of proving the exemptions. Remaining questions about the exemptions and exception would have to be decided by a jury at a second trial. But the employees elected not to pursue the new trial. Instead they put all their eggs in the appellate basket, seeking to overturn the court's ruling that the employer had proven one element of the exemptions. Because both their procedural and substantive challenges to that posttrial ruling come up empty, we AFFIRM.

         I.

         A.

         Six Travis County Sheriff's Office detectives filed this suit alleging that they were entitled to overtime pay. The County was not paying the detectives additional amounts when they worked overtime, so the only issue was whether the detectives were exempt from the FLSA. The County argued that the detectives were exempt as both executive and highly-compensated employees. 29 C.F.R. §§ 541.100(a), 541.601(c). The detectives contended that those exemptions did not apply, and even if they did, they were still entitled to overtime pay under the first-responder exception to those exemptions. 29 C.F.R. § 541.3(b).

         Both of the exemptions the County asserted apply only if the employees are paid on a salary basis. We will get into the details of the "salary basis" requirement later, but it generally means what its label suggests: an employee is paid on a salary basis if he or she receives the same wage each pay period, regardless of "the quality or quantity of the work performed." Id. § 541.602(a).

         Paying employees on a salary basis is not the only requirement for the executive or highly-compensated-employee exemptions. Important to understanding the jury's verdict and the procedural history that followed, both exemptions require an employer to prove more. Even if the County was paying the detectives on a salary basis, the executive exemption required the County to also show that the detectives: (1) were paid at least $455/week;[1] (2) were primarily managers; (3) "customarily and regularly direct[ed] the work of" at least two other employees; and (4) had hiring and firing authority, or that their suggestions as to "hiring, firing, [or] promotion" were "given particular weight." Id. § 541.100(a). The highly-compensated-employee exemption required the County to also show that the detectives: (1) were paid at least $455/week; (2) earned at least $100, 000 annually; and (3) "customarily and regularly perform[ed] any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee . . . ." Id. § 541.601(a).

         Because liability turned on whether an exemption applied, the verdict form started with questions about the contested elements of the two exemptions the County asserted.[2] The first asked whether the County had proven by a preponderance of the evidence that the detectives were "compensated on a salary basis." The jurors answered "no" for each detective. This finding meant neither exemption applied, and that meant the first- responder exception did not matter. So the jury went straight to determining the detectives' damages.

         Four months later, the district court entered judgment for the detectives, adding liquidated damages and postjudgment interest to what the jury awarded. The end of the district court litigation appeared to be in sight.

         B.

         As it turned out, the litigation was just getting started. Within thirty days of the entry of judgment, the County filed the customary Rule 50(b) motion seeking judgment as a matter of law. It argued that no rational jury could have found that the detectives were not paid on a salary basis.[3] The detectives conditionally moved under Rule 59 for a new trial. In the event the court granted the County's motion on the salary issue, the detectives wanted a new trial to determine whether their primary duty was front-line law enforcement or management. That answer would resolve the executive exemption and first-responder exception. At this time at least, the detectives understood that vacatur of the jury's answer to the salary question would require a new trial for additional findings.

         The district court agreed with the County, ruling as a matter of law that the detectives were paid a salary. Having vacated the jury's finding on this first requirement of the exemptions, the district court also granted the detectives' request for a new trial. At a new trial, the court explained, the jury would determine whether the detectives primarily performed office work and, as a result, were exempt as highly-compensated employees.

         The detectives sought reconsideration, contending that they had conditionally asked for a new trial on the management issue, an element of the executive exemption and first-responder exception, not on the office-work issue, which is part of the highly-compensated-employee exemption. The reconsideration motion confused the district court.[4] The court explained that undoing the jury's "no salary" finding left the ultimate exemption question unresolved. With the court now having ruled that the County had proven the first element of both the executive and highly-compensated-employee exemptions, a new trial would be needed to determine if the County could prove the remaining elements of either exemption. So the court asked the detectives to clarify how they wanted to proceed.

         Rather than taking the hint that they needed to challenge both exemptions in a new trial, the detectives changed course; they no longer wanted a new trial on any issues and "unequivocally withdr[e]w" their Rule 59 motion. The detectives instead moved for the reentry of judgment in their favor on the ground that the parties had stipulated to the prima facie elements of an FLSA overtime claim and the County had failed to prove an exemption at trial.

         After again explaining why its vacating the jury's "no salary" finding meant a new jury needed to answer the remaining questions about the exemptions, the district court refused to enter judgment for the detectives. It then withdrew the detectives' request for a new trial given that they no longer wanted one.

         Standing their ground, the detectives again sought judgment on the jury's verdict. The district court denied that request as an untimely motion for judgment as a matter of law. The court repeated what it had already "explained several times": its posttrial ruling that the County paid the detectives on a salary basis meant the only way to move forward with the case was for a new trial that would answer the remaining questions about whether the FLSA covered the detectives. Despite the detectives' insistence that they no longer wanted a new trial, the court gave them about a month to request one. If the detectives did not seek a trial within that period, the court would dismiss the case for want of prosecution.

         The broken record kept playing. Rather than asking for the new trial, the detectives yet again asserted-out of procedural vehicles, this time in a "motion for clarification"-that they had stated a FLSA overtime claim; that the grant of judgment on the salary issue did not invalidate the "prima facie portion of the verdict"; and that the County was not entitled to another opportunity to prove its affirmative defenses. The detectives also contended that dismissal for failure to prosecute would be "an incredibly unjust result." If the court did not enter judgment in ...


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